In This Review

Managing the World Economy: The Consequences of Corporate Alliances
Managing the World Economy: The Consequences of Corporate Alliances
By Peter F. Cowhey and Jonathan D. Aronson
Council on Foreign Relations Press, 1993, 343 pp

The authors are fascinated by international corporate alliances, which while preserving the nationality of partners greatly complicate the practical implications that are thought to flow from nationality. They nicely document the growth of these alliances, with case studies of the automobile, semiconductor and international telecommunications industries. But their macroeconomic analysis is less successful. They characterize the U.S. and European approach to governing the post-1945 world economy in terms of six basic pillars that need to be altered as we approach the 21st century. They make many sensible points, such as the need for a global antitrust policy and bilateral trade discussions, but the case for a basic redesign of the governing principles, as opposed to continual constructive adaptation, is not made clear. It is not surprising that the evolution of the world economy has resulted in greater complexity than six simple pillars can handle satisfactorily. But the authors fail to recognize that their six pillars represent after-the-fact simplification that ignores the detailed complexities of the period from 1950 to 1980. We cannot ignore today's complexities in that way. History is always simpler than the present because we make it that way in order to comprehend it with less effort.